Ignore the soporific jargon of procurement. Privatisation is a race to the bottom | Zoe Williams

The outsourcing of state services always leads to workers being paid less. Instead our leaders call it an ‘efficiency saving’

The danger is not when a politician tells you a demonstrable untruth, straight to your face – perhaps an MP might say out loud that there is no shortage of jobs, or the prime minister might claim an increase in midwife numbers, having failed to mention the very much greater increase in the number of babies (I know! So unhelpful, but nevertheless, nice and transparent). I don’t mind any of that; I think it hurts them more than it hurts us.

What I mind more is a large, unverifiable statement, then some statistics that don’t immediately knit into it. There’s no better illustration of this than the persistent coalition line that, as the public sector is pruned back, the private sector will spring up in its place, providing jobs as the result of its suddenly unstrangled growth. I could only ever see this as a post hoc explanation for a boom gone by; it never seemed like a trajectory one could actually rely upon and plan around. It’s a gardening metaphor, for one thing; they never work, not even in gardening.

However, the confidence of the Treasury remained undimmed, and every quarter in which growth was not suddenly stimulated by the dwindling public sector was blamed on factors beyond a government’s control – we’re all pretty well familiar with them now: it’s either too cold or too hot or there’s a royal wedding or it’s eurogeddon.

But last October, Frank Dobson put an innocent sounding question to the chancellor of the exchequer: “What proportion of the increase in private sector jobs was represented by the contracting out of former public sector jobs?” This was salient for a number of reasons: for a start, that month followed one of the worst quarters on record for new private sector jobs, with just 5,000 posts filled between June and September 2011. From an economist’s perspective, that is as good as standing still.

So, if it were to turn out that any significant proportion of that 5,000 were actually just straight transfers of public sector workers, then that slightly gives the lie to the great productivity we were all supposed to expect, as the gladiator of market enterprise sloughed off the chains of the rotten state. And there are problems related to outsourcing that go way beyond distorting the buoyancy of the jobs market.

First, if outsourcing represents a cash saving for the government department, exactly how is that money saved? I want to make a dainty point about whether or not it’s a coincidence that chief executives of private companies are paid more than their public sector equivalents, but I just don’t have time: very often, I am going to stick my neck out and say almost always, if the private sector is cheaper, that is not an “efficiency saving”, that’s because they’ve driven down wages in the middle and the bottom.

If Reliance can do Ordnance Survey’s admin and catering for less money than OS did it themselves, or Boeing can do IT for the Ministry of Defence, and that’s cheaper, it seems like an obvious boon. But, especially in low-skilled work, you have to wonder how it comes to be cheaper. Nobody’s invented a quicker way to do cleaning; it’s more likely that wages are forced down, job security is destroyed, pensions are axed. The ludicrous thing is, we’re told that we all win when other people’s wages go down, because we all put into the public purse: actually, though, the difference in the cost of those services is piffling, set against the problems we store up for ourselves when people don’t earn a living wage and can’t save for their old age.

Let’s return to October for a second: Dobson’s question was sent to Nick Hurd, who sent it to the UK Statistics Authority, who replied that they didn’t know. Maybe that sounds evasive. It is amazing how common it is for major accounting bodies to just … not know. If you ask how much the NHS spends on contracted-out services, how many employees are laid off just to be rehired as contractors, how many contractors have been contracted to tell the NHS how to lay people off, just so those people can be hired back as contractors, the answer always comes back: “nobody knows.”

And yet, this week, it turned out that certain individual departments did know: in the year 2010/2011, the Ministry of Defence has contracted out 460 jobs; the Department for Education, 493; Ordnance Survey, 53; Defra, 106 (six of these were from Kew Gardens); the Cabinet Office, 19. The major single change is that Ofsted’s Early Years Inspection Services have been privatised, though they insist that “quality assurance” remains in house. We will have plenty of time to see how that pans out.

Overall, the figure is over a thousand – everybody expects that to be larger for 2011-2012, and much larger once they include those two looming absences: the NHS and local government. Unison made this observation about local authorities: “Since 1 April 2011, Unison has picked up 2,385 local authority contract adverts placed in the Official Journal of the European Union, and been sufficiently concerned about the workforce implications to alert regions to 608 notices to date. A hundred have been prior information notices. These can be advance notices that a service will be put out to procurement at a later date. The remaining 508 have been contract notices, so the actual advert is for the service after the decision to outsource has been made.”

It’s the least sexy word in the English language, “procurement”, just looking at it makes me want to go for a snooze. But that’s how to sleep your way to privatisation; now, when I see it, I replace it with “race to the bottom”. Every lesson of the last 20 years tells us that the outsourcing of services either leads to lower wages, the government department being ripped off, or, in many intoxicating cases, both. It’s time to start insourcing.